Platinum Equity

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Platinum Equity
Industry Private equity
Founded 1995
Founder Tom Gores, Chairman & CEO
Headquarters Beverly Hills, California, United States
Products Investments, private equity funds, leveraged buyouts
Website platinumequity.com

Platinum Equity, LLC is an American private equity investment firm founded by Tom Gores in 1995. The firm focuses on leveraged buyout investments of established companies in the U.S. and Europe.[1]

The firm is headquartered in Los Angeles, California with regional offices in Boston, New York, London, and Singapore. In 2010, it ranked #31 on Forbes’ Largest Private Companies list for 2010[2] and #1 on the 2010 Los Angeles Business Journal list of LA's Largest Private Companies.[3] The firm manages three private equity fund vehicles, Platinum Equity Capital Partners and Platinum Equity Capital Partners II, and [4] the firm recently completed raising Platinum Equity Capital Partners III, a $3.75 billion buyout fund.

History

Platinum Equity was founded in 1995 by Tom Gores. The firm's first acquisition was LSI, a company that generated computer graphics to re-create accidents for courtroom testimony. After purchasing it for $200,000, Platinum Equity focused on servicing existing customers and returning the company to profitability.[5]

Over the next five years, between July 1996 and September 2001, the firm made 32 acquisitions with $226 million, and realized $940 million on those investments. These acquisitions included a call center (Foresight Software), networking gear (Racal Electronics), and voice and data service (Williams Communications).[5] BusinessWeek ranked the firm number 10 on its 1999 list of the country’s top 20 private IT organizations, based on 1998 revenues.[6][7]

During this period of acquisition growth, additional partners joined the firm and several other joined through key acquisitions starting in 1999.[8][9][10]

The firm’s first fund, Platinum Equity Capital Partners, was raised in 2004 and had a 62.5% net internal rate of return as of June 30, 2009.[11] For the second fund, Platinum Equity Capital Partners II, which closed in September 2008, despite uncertainty in the financial markets. the firm initially sought a $1.5 billion leveraged buyout fund and nearly doubled it by raising $2.75 billion.[12][13]

In 2009, during the financial crisis, Platinum Equity acquired 14 companies in the first 11 months of 2009, eight of them full buyouts.[12]

Investments

Since 1995, Platinum Equity has acquired over 115 businesses across a broad array of industries, including information technology, telecommunications, logistics and distribution, industrials, manufacturing, media, real estate and automotive. Those acquisitions represent more than $27.5 billion in aggregate annual revenue at the time of acquisition.[14]

Information technology

In October 2004, the firm completed the acquisition of CompuCom Systems, Inc. which was one of the largest public-to-private transactions in 2004.[15] Then, in December 2004 the company acquired General Electric’s IT Solutions division. The merger brought CompuCom to $1.7 billion in annual revenue and more than $500 million in services.[16] The business was sold to Court Square Capital Partners in 2007.[17]

Logistics and distribution

In 2002, Platinum combined Health Care Products, a division of Royal Philips Electronics, and Diagnostic Imaging, a subsidiary of PSS World Medical into a single company called SourceOne Healthcare Technologies. Both companies were distributors of radiology products like film, chemicals and lead shields. Together, they had $1.3 billion in revenue, making SourceOne dominant in the very fragmented $11.5 billion marketplace in which it competed.[18] Merry X-Ray acquired SourceOne Healthcare Technologies from Platinum Equity in November 2005.[19]

Industrials

PNA Group, a metals processor, was acquired in May 2006 from TUI AG. At the time of acquisition, PNA included three companies. While in Platinum Equity’s portfolio PNA gained a seasoned metals CEO, Maurice S. Nelson, Jr. and added three locations.[20] Platinum Equity sold PNA Group to publicly traded Reliance Steel & Aluminum Co. (NYSE: RS) in August 2008 for $300 million. The purchase price, together with the $181 million in accumulated profits, represented 27 times Platinum’s original investment of $17.5 million just two years earlier.[21]

References

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  4. ↑ Deborah Crowe (September 3, 2008) Platinum Equity Closes $2.75 Billion Private Equity Fund.Los Angeles Business Journal.
  5. ↑ 5.0 5.1 Steven Bertoni (October 19, 2009). Ready to Play. Forbes Magazine.
  6. ↑ Larry Armstrong (June 21, 1999). The Leading Private Info-Tech Companies. BusinessWeek Online.
  7. ↑ Phyllis Berman (July 9, 2001). Buyout Buccaneer. Forbes.
  8. ↑ Platinum Equity lists partners, officers. Meadville Tribune. September 14, 2007.
  9. ↑ “Alden to sell Metrorolical and imaging operations.” Boston Business Journal. December 20, 1996.
  10. ↑ Platinum Equity lists partners, officers. Meadville Tribune. September 14, 2007.
  11. ↑ Repolishing Platinum, Readers Say Section. Forbes Magazine. November 2, 2009.
  12. ↑ 12.0 12.1 Russ Banham (January 5, 2010). CFOs to Watch: Keeping the Deals Coming. Treasury & Risk.
  13. ↑ The Private Equity Breakdown 4Q 2009. PitchBook.
  14. ↑ Company Profile
  15. ↑ “Platinum Equity Completes Acquisition of GE IT Solutions; Former General Electric Unit Will Be Integrated With CompuCom Systems, Inc". BNET. December 1, 2004
  16. ↑ “Platinum Equity Buys GE's IT Solutions.” VARBusiness. December 4, 2004.
  17. ↑ Platinum Equity Completes Sale of CompuCom Systems to Affiliate of Court Square Capital Partners. TMC News. October 3, 2007.
  18. ↑ Phyllis Berman (January 22, 2003). Tom Gores’ X-Ray Vision. Forbes.
  19. ↑ “Merry X-Ray Acquires SourceOne Healthcare Technologies from Platinum Equity.” BNET. November 21, 2005.
  20. ↑ Steven B. Weiner (July/August 2008 Issue ). Fresh Eyes. Forward Magazine.
  21. ↑ Deborah Crowe (April 30, 2009). Platinum Equity Buys IT Company. Los Angeles Business Journal.

External links

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